European Company (Societas Europaea, SE)

The European Company (SE) has added additional facets on obligatory worker involvement at European level particularly by including – for the first time – participation rights at company board level. As of 8 October 2004 it became possible to establish a European Company (SE). The main purpose of the SE statute (EC 2157/2001) is to enable companies to operate their businesses on a cross-border basis in Europe under the same corporate regime. An important feature of this new company form is that – by means of the associated SE Directive (2001/86/EC) – obligatory negotiations on worker involvement in SEs were introduced which include the question of representation of the workforce at board level.

Since 2005 the ETUI has been regularly issuing information on registered SEs which is supplied by its SEEurope research network. Since July 2008 the information is accessible via a specific online database. The ECDB delivers key data to facilitate observation and analysis of developments on European Companies.

In April 2017, during its meeting in London, the SE Europe network resolved to change its name to 'Worker Participation Europe network'. The change of name shall better reflect the evolution in the network's composition, interests and research backgrounds that go beyond the narrow focus on European Company (SEs) and workers' representation therein. Apart from the change of name the networks activities and operation remain unchanged.

The SEEurope Network – organized by the European Trade Union Institute – was founded in 2003 to observe the transposition of the SE legislation and its practical impact on businesses and industrial relations. The network involves legal, economic and industrial relations experts from the European Economic Area (EU member states plus Norway, Iceland and Lichtenstein). Over the years the network has produced a broad range of publications, including country reports, case studies and topical reports. From the beginning, the research and monitoring has been conducted with a view to also meeting the needs of practitioners in Europe involved in the founding of an SE.

The European Commission has started the review of the European Company Statute as foreseen in Art. 69 SE of the SE Regulation. The Commission shall forward to the Council and the European Parliament a report on the application of the Regulation and proposals for amendments, where appropriate. In this section we follow-up the discussions and proposals with regard to a possible revision of the SE legislation.

The table provides an overview of the more than 40-year-long history of the European Company. This delay was caused by a deadlock in the Council of Ministers where unanimity was required. Resistance arose also on the question of board-level representation of employees. Objections were raised by "both sides": While countries with strong systems of board-level representation (like Germany or Austria) feared a weakening of their national systems, countries with rather weak - or even non-existent - board-level representation (like the UK and Spain) were afraid of importing something that is unknown to their industrial relations systems.

In transposing Directive 2001/86/EC, EU member states were granted quite a number of choices. This section looks at the ways in which the SE Directive has been transposed in the different EEA member states and provide information on key aspects, such as the selection of the national representatives on the special negotiating body and the standard rules. The Comparison Tool enables you to make individualised comparisons between countries and criteria.

The European Cooperative Society (SCE) aims to reduce existing cross-border obstacles for cooperatives and to make it easier for them to operate across European borders. The SCE thereby complements the legislation on European Companies (SE) which has enabled companies to set up as a European public limited company. As in the case of the SE, the SCE legislation consists of a Regulation on the Statute for an SCE (1435/2003) and an accompanying Directive on worker involvement (2003/72/EC). The Regulation came into force from 18 August 2006, by which date the member states also had to transpose the Directive into national law.

Since the adoption of the SE legislation in 2001 the idea of creating a European company form targeted at small and medium-sized enterprises (SMEs) has been on the political agenda. In 2002 a High Level Group of Company Law Experts organized by the European Commission proposed the creation of the European Private Company, or Societas Privata Europaea (“SPE”). The Commission adopted an SPE proposal in 2003, followed up by a proposal for a Council Regulation on the Statute for a European private company (SPE). The proposal however quickly ran into trouble as it was criticized heavily from many sides. Among the strongest critics have been the ETUC and its member trade unions which fear that this legal form could be used by companies to avoid national rules on worker involvement. Also the issues of separation of home and host country, minimum capital requirements and taxation issues remain controversial between member states.

On 24 January 2017, the European Court of Justice heard what could turn out to be a landmark case (C-566/15 Erzberger) conce

european court of justice

rning workers’ board-level participation.

Mr Erzberger, a minority shareholder of TUI AG – a multinational travel and tourism company headquartered in Hannover, Germany -- had brought a case before a Berlin court challenging the composition of the company’s Supervisory Board. According to German rules, the employees working for the group but outside German territory are not counted and therefore excluded from the election of board-level employee representatives since they have neither active nor passive election rights. The applicant argues that such geographical rules restrict the right to free movement of workers and also constitute discrimination on the basis of nationality, both of which would be contrary to EU law.